If past behavior is a good predictor of the future, mortgage lenders (as well as mortgage brokers, settlement services providers and real estate brokers, for that matter) should brace themselves: A new regulatory compliance shoe is about to fall, with private litigation leading the way.
The focus is website accessibility – a catch-all phrase that means making websites and other digital platforms and files accessible to individuals with disabilities.
There are no Web accessibility regulations currently in place that are aimed at financial institutions generally or at the housing and housing finance industries specifically. But you don’t need a crystal ball or 20/20 vision to see them coming. A look at the history of the Americans with Disabilities Act (ADA) will tell you what you need to know.
When that law was enacted in 1990, the banking industry’s widespread strategy was to assume that the requirement to make facilities accessible to those with disabilities applied only to governmental entities and not to it. But a few law suits against high-profile, private-sector targets, such as Bank of America, brought the banking industry pretty quickly into line.
The Internet was just taking shape when Congress enacted the ADA, so the statute doesn’t say anything about websites. But in 1996, the U.S. Department of Justice (DOJ) issued a legal opinion stating that all entities subject to the ADA – essentially, any entity, public or private, offering goods and services to the public – would be required to make their Internet communications accessible, as well. In 2010, the DOJ announced that it would be developing regulations detailing these compliance requirements.
Since then, the DOJ has initiated a few law suits and intervened in several others complaining about inaccessible websites. The DOJ recently issued a “statement of interest” in a Florida website accessibility case “to clarify public accommodations’ long-standing obligation to ensure that individuals with disabilities are not excluded, denied services or treated differently than other individuals because of the absence of auxiliary aids and services, such as accessible electronic technology.” Although not related directly to the mortgage industry, the full statement illustrates the DOJ position that the accessibility requirement for online services applies broadly to places of public accommodations, including financial institutions.
A big target
After several delays, the DOJ rules are now scheduled for release in 2018. And there is every reason to anticipate that the real estate and real estate finance sectors will be among the prime targets. Think about it. How do consumers shop for homes, apply for mortgages, receive mortgage disclosures and execute closing documents? Increasingly, online. And how accessible are these websites – and the mobile applications related to them – to people who are hearing- or vision-impaired or to those with mobility or cognitive disabilities? With rare exceptions, not very accessible at all.
Plaintiffs’ attorneys aren’t waiting for the DOJ to finalize its rules. According to the most recent estimates (and these estimates are a moving target), more than 250 law suits were filed last year alleging inaccessibility of websites or mobile applications. This total doesn’t include the demand letters plaintiffs have sent to businesses asserting website accessibility claims. Seyfarth Shaw, an international law firm, reports that the number of law suits filed under Title III of the ADA, targeting accessibility of all kinds (buildings, as well as websites), increased by 37% in 2016 compared with an 8% year-over-year increase the year before.
Although financial institutions have not been targeted in the disability suits filed to date, financial industry trade groups report that banks all over the country are receiving demand letters from disabled consumers, advocacy groups or attorneys representing them complaining that bank websites are inaccessible, in violation of the ADA. Nearly 20% of the 580 banks responding to a survey conducted last year by the Independent Community Bankers Association (ICBA) said they had received demand letters, which industry executives say are “spreading like a virus.” Both the ICBA and the American Bankers Association are advising their members to take these demand letters seriously and to deal proactively with accessibility concerns.
Good advice
That is good advice, but few industry executives seem to be following it, either because they aren’t aware of the accessibility issue or because they have decided to wait for detailed regulations that make compliance mandatory and make compliance requirements clear.
This wasn’t a good strategy for dealing with ADA compliance 25 years ago, and it is not a good strategy for dealing with Web accessibility today – for several reasons:
1) You may be sued, and the litigation risks are high. Consumers who wanted to claim that a building didn’t meet the ADA’s accessibility requirements had to actually visit the building; consumers or advocacy groups that want to complain about inaccessible websites need only click on the sites.
2) Your reputation will suffer. Litigation does not reflect well on any business. Voluntary, proactive compliance – “because we think it’s the right thing to do” – works much better and can actually enhance your reputation rather than detract from it.
3) Your costs will increase. A disabled individual who can’t navigate a mortgage lender’s website will need personal assistance.
4) You will lose business. Consumers who can’t independently navigate your website may not sue you, but they won’t do business with you, either. And there’s a lot of business at stake. The Centers for Disease Control and Prevention estimate that 53 million adults – one in every five Americans – have visual, hearing, mobility or cognitive disabilities. The U.S. Census Bureau estimates that at least half of those disabilities are classified as “severe,” and these disability numbers will increase as baby boomers age.
The litigation threat for financial institutions is real, but so are the opportunities to serve this growing population.
Dealing with demand letters
So what should you do? Let’s start with demand letters. If you get one, don’t ignore it. You should treat it as you would any legal concern and contact your attorney. Additionally, you should do the following:
- Research – or have your attorney research – the law firm or advocacy group that sent the demand letter to assess how active it is in the accessibility arena. Find out how successful it has been in securing settlement agreements or winning suits filed against companies it has targeted. This analysis will influence your strategy for dealing with the demand letter.
- Review the contract with the vendor that designed your website, software tools, mobile application or documents to see if it requires the vendor to comply with the ADA. If the contract contains this language (it should, but most don’t), the vendor should be responsible for the cost of any necessary remediation work required to meet accessibility requirements. Future contracts should have this language and should be part of vendor management discussions.
- Review your website to assess its level of compliance with accepted accessibility standards, such as the Web Content Accessibility Guidelines 2.0 (WCAG 2.0: w3.org/WAI/intro/wcag.php) developed by the World Wide Web Consortium. Although there are some issues you will be able to identify on your own (more about this later), you should plan to retain a company or an individual who specializes in accessibility audits to undertake a comprehensive review. Your accessibility audit vendor should also provide the detailed recommendations you are going to need to address the accessibility problems the audit identifies.
- Involve your IT staff, compliance officer, content providers and marketing team (as well as your attorney) early on in these discussions. They will be responsible for overseeing implementation of accessibility-related changes and for ensuring ADA compliance going forward.
You should view a demand letter not just as a litigation threat (which it certainly may be), but also as an opportunity to learn about Web accessibility, as well as to begin making the changes you will eventually have to make to your website and other digital environments you make available to consumers.
You shouldn’t wait for a demand letter to begin this process. If you are targeted in the future, you will be in a much stronger position if you can show you have already begun to address the accessibility deficiencies about which consumers or advocacy groups are complaining.
What to look for
How do you know if your website is accessible? The WCAG 2.0 guidelines mentioned earlier are a good place to start. These are the prevailing standards that plaintiffs’ attorneys are using and that the DOJ is widely expected to incorporate in its regulations. They will give you a good idea of the major features an accessible website should contain. They will also help you understand the design, programming and other changes consultants may recommend.
Accessibility guidelines are designed to ensure that individuals with visual, hearing, mobility or cognitive disabilities are able to access your site, navigate it and perceive the information on it independently.
The WCAG’s guiding principles are that a site must be “perceivable,” “operable,” “understandable” and sufficiently “robust” to be accessible to the wide range of strategies and assistive technologies disabled consumers will use.
You won’t be able to tell much about how well (or poorly) your site comports with the WCAG by simply looking at it. Software programs that detect accessibility strengths and deficiencies can help. Some of the most popular include the following:
- The WAVE Accessibility Toolbar: //wave.webaim.org/extension/;
- HTML_CodeSniffer: //squizlabs.github.io/HTML_CodeSniffer/; and
- tota11y:- //khan.github.io/tota11y/.
But automated testing tools will identify only about 30% of possible accessibility deficiencies. The information they provide will be useful, but it won’t be complete, and it won’t be a substitute for a professional accessibility audit.
Selecting an accessibility auditor
The pool of companies and experts who are qualified – or claim to be qualified – to conduct these reviews is small but growing. As with the selection of any vendor, your primary considerations should be experience and competence. You don’t want your website to be the first your accessibility expert has audited. You want to know how long the company has been working in the accessibility arena and what business sectors it has served. Ideally, you want an auditor who has worked with other financial institutions. Check references the company provides, but also ask industry executives – at other financial institutions or at your trade association – if they know anything about the companies or individuals you are considering or if they know of others they might recommend. When you identify qualified candidates, evaluate them thoroughly, and request the following:
1) Insist on a written proposal, describing, in detail, what the audit will entail and how much it will cost. The proposal should explain the testing tools, strategies and standards the company will use to assess your site and estimate how long the process will take.
2) Interview senior executives and the individual(s) who will actually be doing the audit. A good fit with both their philosophy and their personality is important.
3) Ask detailed questions about the company, its experience and how it operates: How large is the staff – how deep is the bench? Will the audit be done by one person or by a team? A one-person audit will probably take longer. With what software platforms and applications does the company have experience? PDFs? Calculators? Loan applications? Word documents? All of the above? None of the above? You want to be sure the company can work with the platforms and applications you use.
4) Does the company have the capacity to implement the design and programming changes it recommends? If not, you will have to hire another firm to do that work. Can the company build a new site from the ground up if modifying an existing site is too costly, time-consuming or an impediment to continuing business? Conversely, can it maintain site integrity and operations while remediating problem areas, if that is a valid approach for your site? Will it train your team to continue to keep your sites and all related assets in general compliance on an ongoing basis? What kind of commitment will the company make to you?
In addition to doing the initial audit and remediation work, you will want the company to return annually or semiannually to identify any accessibility problems that may have developed in the interim. Seemingly unrelated programming changes on your site could affect accessibility coding; new documents or platforms you’ve added may lack accessibility features.
You want to ask a lot of questions, but you should also listen carefully to the questions accessibility providers ask about you as an indicator of how much they know about your business and your industry. You want them to be Web accessibility experts, but it is equally important that they understand the specific accessibility issues your customers will encounter with your Web content and your applications.
Weighing your options
Some industry executives are concerned about the cost of making their websites accessible, and the concern is understandable. The analysis and remediation required to meet accessibility standards can be costly, depending on the complexity and number of pages of a website. But failure to undertake these efforts will be costly, too – in litigation risks incurred, reputation damage suffered and business opportunities lost.
You could wait for the regulations making accessibility mandatory, as some industry executives advise, but the primary argument for doing so (“You’ll know exactly what you have to do if you wait for a mandate”) is weak. The DOJ has indicated in past statements and actions that its regulations are going to track the existing WCAG standards closely. The regulations, when they are finally issued, aren’t likely to tell you much more than you already know about the disability standards you have to meet. It’s not going to cost any less to meet those standards next year than it costs today. And it will cost a lot more if you’re operating under the public scrutiny and deadline pressure a court order or a regulatory demand would create.
Web accessibility is already a business necessity, even if it isn’t yet a regulatory requirement. Your choices are to remediate now, under your own terms and your own timetable, or wait for regulations, consumer complaints or litigation to dictate the terms and establish the timetable for you. Controlling your own destiny is almost always the better choice.
Jack McElaney is vice president of sales and marketing for Microassist, where he is responsible for developing risk compliance programs, auditing services and training products aimed at helping banking institutions comply with ADA requirements.